Feb 22, 2012

Over-Priced Real Estate Market is Here – is the Reason of Home Mortgage?

According to reports, the Australian residential property sector has been functioning remarkably well in the last few years and has been able to show much better performance than what has been expected of it. But now with the current interest rates and the rising home prices you can’t say that all is well. Real estate is considered to be one of the investment options that can help you to pay off your unsecured debts through debt settlement. And now with the rising prices of the Australian residential property, the situation might turn out to be a bit awry. So, will the people will get sufficient mortgage loan for it. So, getting new home mortgage is all not an easy task.

Australian real estate propertyAustralian economy rode through the global financial crisis fairly well but 2010 have been a fairly difficult year for most of the people involved with the country's commercial real estate sector. And in case of real estate market in regards to residential property, Australia is reported to have been a front runner on the housing prices.So, there can be a further slowing of the sales of home due to the appreciation in price in this year (2011). In addition to this, Australia's close trade ties along with Asia and the resource wealth may continue to go on underpinning a solid pace of the domestic activity, and the higher interest rates may even worsen the already strained affordability of the people.This means that people will lower home buying and thus the real estate market may have to suffer. Moreover, the renowned economist Adrienne Warren has said back in 2010 that in 2011 the Reserve Bank would go on tightening the rules on spending, and so he had forecasted 75 basis point rise in the interest rates by the end of this year (2011). In addition to this she has also commented that the increase in the consecutive interest rate by the Reserve Bank of Australia will total to almost 175 basis points since the month of October of 2009. Moreover, the expiry of grant in regards to the first home owners has already cooled off most of Australia's red-hot property market.So what is the state of Australia’s housing market? The housing bubble, the affordability crisis, the extremely over-inflated markets are some flattering descriptions for Australia's housing market and its associated growing in regards to the state of the country’s residential real estate sector.Some however, suggest that the country’s real estate market is heading for a price crash which comparable to the one which was experienced in the US during GFC, or may be more recently in places like Ireland. In Ireland, the housing bubble actually caused a monumental collapse in the values of the local properties.So, according to experts, only if the mining boom came to an end and if lots of people lose their jobs, the country may see a price crash in regards to the real estate market.